Via the ABA Journal, we learned of a bizarre case involving an internet advertising campaign by Toyota Motor Sales USA, Inc. (“Toyota”) and Saatchi & Saatchi North America, Inc. (“Saatchi”) See Duick v Toyota Motor Sales, U.S.A., Inc. Case No. B224839 (CA Dist. 2 Ct. App., Aug. 31, 2011) Here is some background: The campaign, which was targeted at young men, encouraged them to provide Toyota with the name of a friend or acquaintance. That individual would then receive an online invitation to a personality evaluation, as part of a so-called “interactive experience” in a program called “Your Other You,” according to the Threat Level blog of Wired. Those who followed through on the personality evaluation invitation were told to scroll down through an online list of terms and conditions, after which they confirmed, with a click or two, that they had read and agreed to them. In the case of Amber Duick, the young woman allegedly began to receive emails from a seeming stranger who told her he was traveling cross country, about to descend upon her home with “Trigger,” an ill-behaved pit bull—if he could stay a few steps ahead of the law and avoid excess alcohol consumption. (“Trigger don’t throw up much anymore, but put some newspaper down in case,” one email suggests.) Duick filed suit against Toyota and Saatchi alleging eight causes of action including intentional infliction of emotional distress, negligence, and false advertising, and seeking “compensatory damages of not less than $10,000,000” as well as other forms of relief. Defendants moved to compel arbitration pursuant to the arbitration provision in the terms and conditions. The trial court denied defendants’ motion and defendants appealed. The terms and conditions contain the following arbitration provision: “You agree that . . . any and all disputes, claims, and causes of action arising out of, or connected with, Your Other You . . . shall be resolved individually, without resort to any form of class action, and exclusively by arbitration to be held solely in Los Angeles, California under the auspices of the American Arbitration Association and pursuant to its Commercial Dispute Resolution Rules and Procedures.” The appellate court reasoned that the boilerplate language in the online agreement stating that Duick might receive emails in connection with the personality evaluation did not adequately inform Duick of the true nature of those emails, so she could either consent or reject the terms. Therefore, the court concluded that “defendants deprived Duick of a reasonable opportunity to know the character of the proposed contract. The contract is consequently void because of fraud in the inception, and every part of it is therefore unenforceable, including the arbitration provision. “ Technorati Tags: law, ADR, arbitration

We came across an interesting article at the ABA Section of Litigation entitled Fixing the Way Multi-Arbitrator Tribunals Are Formed. The piece, written by Herman Manuel Duarte, discusses common issues with unilateral appointments of arbitrators. Here is an excerpt: One of the pressing issues in international arbitration is the practice of unilaterally appointing arbitrators and its effect on the decision-making process. The term “unilateral appointment” refers to a party’s decision to appoint its own arbitrator at will, without an agreement by the counterparty or the arbitral institution. This does not mean that the arbitrator appointment violates the rules of the arbitral institution; rather, the decision rests with the appointing party alone. The common practice in multi-arbitrator tribunals is that two out of the three arbitrators are unilaterally appointed by the parties, one each. The third arbitrator is selected by the arbitrators appointed by the parties. This can create all types of situations, from collaborative arbitrators who fulfill their functions with due diligence to rebellious arbitrators who refuse to participate in proceedings or who issue ugly dissents. As an example of the latter, there are reports made by experienced practitioners showing that an elevated number of dissents are produced by the arbitrator who was unilaterally appointed by the losing party. At least two independent studies have shown a strong correlation between dissents and the unilateral appointee of the losing party. The problem becomes even more significant when the dissents are used as the basis for a challenge or to raise objections to the enforcement of the award. The full article is available here. Technorati Tags: law, ADR, arbitration

CNN reports that BP and Anadarko have settled their dispute over the “Deep Water Horizon” oil spill. According to the report, Anadarko will pay BP $4 billion dollars to settle BP’s claims related to the Gulf of Mexico disaster of April, 2010. The settlement will bring the related arbitration to an end. See In RE: Oil Spill by the Oil Rig discussed here. Technorati Tags: law, ADR, arbitration

Those of you who missed the “Borders Skirmishes” symposium last week at University of Missouri’s Center for the Study of Dispute Resolution can view the keynote address by Gary Born at the symposium website (click on the link under “Keynote Webcast”). Gary Born is widely regarded as the world’s preeminent authority on international commercial arbitration and international litigation, having been selected to receive the Global Arbitration Review’s inaugural “Advocate of the Year” award and the Legal Media Group’s “World’s Best International Litigator” award. The “Borders Skirmishes” symposium focused on the intersection between litigation and international commercial arbitration, and brought together speakers and attendees from fifteen countries in Europe, Asia, Africa and the Americas. Papers from the symposium will be published in the University of Missouri’s Journal of Dispute Resolution in early 2012. If you have any questions, please contact our friend and contributor to this blog Professor S.I. Strong via email at strongsi@missouri.edu. Technorati Tags: law, ADR, arbitration